The National Institute on Aging (NIA) told the federal Advisory Council on Alzheimer's Research, Care, and Services on February 9, 2026, that dementia costs the United States $781 billion a year. That figure, presented by NIA Director Richard J.
Hodes, comes from the USC Schaeffer Center's "Cost of Dementia in 2025" report, which NIA itself helps fund through a cooperative agreement with the researchers. For spouses and partners providing care, the number matters less than what's inside it. Most of the $781 billion isn't money changing hands through Medicare, Medicaid, or insurance — it's unpaid labor, lost income, and diminished quality of life absorbed directly by the household.
Medical information disclaimer: This article is for general educational purposes only and does not provide medical advice, diagnosis, or treatment. Always consult a physician or other qualified health professional about symptoms, medications, tests, or treatment decisions.
Table of Contents
- Where the $781 Billion Actually Comes From
- How Much of This Falls on the Medical System
- The Cost of Unpaid Care by Spouses and Partners
- Quality of Life — The Largest Cost Nobody Gets Reimbursed For
- What This Means for Planning as a Spouse or Partner
- Frequently Asked Questions
Where the $781 Billion Actually Comes From
The USC Schaeffer Center's report estimated 5.6 million people living with dementia in the U.S. as of 2025, with 5.0 million of them age 65 or older. Researchers built the $781 billion total from that population by tracking three categories of cost: medical and long-term care spending, unpaid caregiving, and quality-of-life loss. NIA's slides repeated the Schaeffer Center's number because the agency is a direct funder of the underlying research, part of what's called the U.S.
Cost of Dementia Project. That's worth knowing if you see the figure cited elsewhere: it isn't an NIA-generated estimate, it's a federally supported academic one that NIA adopted for its own briefing. One complication: the number was already out of date by the time it reached the Advisory Council. The same USC research team published a follow-up in Alzheimer's & Dementia on June 24, 2026, raising the total to $818 billion for 2026, covering 5.7 million Americans with dementia and 5.2 million unpaid caregivers logging 6.8 billion hours of care. If you're budgeting or planning around this figure, treat $781 billion as last year's snapshot, not the current one.
How Much of This Falls on the Medical System
Medical and long-term care spending totaled $232 billion, or about 30% of the $781 billion. Medicare covered $106 billion of that, Medicaid covered $58 billion, and patients and families paid $52 billion directly out of pocket, according to the Schaeffer Center report. That means roughly 27 to 30 cents of every dollar in the total cost moves through the formal medical and insurance system.
The rest — about 70% — never touches a claims form. It shows up as caregiving hours, forgone wages, and a decline in wellbeing that insurance doesn't price or reimburse. For a spouse weighing what Medicare or Medicaid will actually cover, this split is the practical takeaway: formal coverage addresses less than a third of the total economic burden. The larger share is carried informally, inside the home.
The Cost of Unpaid Care by Spouses and Partners
Unpaid care by family and friends — the category most spouses and partners fall into — totaled $233 billion in the Schaeffer Center's accounting. That figure covers about 6.8 billion hours of caregiving nationally, valued at a replacement-cost rate of $34.50 per hour, the wage it would take to hire someone else to do the same work. This single category is nearly as large as all formal medical and long-term care spending combined ($232 billion).
It reflects time spent on tasks like bathing, dressing, managing medications, coordinating appointments, and supervising a person who can no longer be safely left alone — work a spouse typically absorbs without pay or formal recognition. Beyond the hours themselves, care partners who cut back work hours or left jobs entirely to provide care lost about $8 billion in earnings in 2025. That loss falls specifically on caregivers still of working age — often a spouse balancing a job against a partner's escalating care needs.
Quality of Life — The Largest Cost Nobody Gets Reimbursed For
Reduced quality of life was the single largest component of the entire $781 billion estimate: $302 billion attributed to people living with dementia, plus another $6 billion attributed to their care partners. Together, that's more than a third of the total figure, and it carries no price tag anyone pays or collects. This matters for spouses because it's a cost with no corresponding transaction. There's no invoice, no reimbursement claim, no line item.
It represents a measured decline in wellbeing — for the person with dementia and for the spouse absorbing the daily reality of the disease. It's also the least certain figure in the report. The Schaeffer Center's own documentation notes that quality-of-life losses are modeled estimates of wellbeing, not directly observed spending, which makes this component the softest part of the total. A spouse reading these numbers should treat the $308 billion combined quality-of-life figure as a measure of impact, not a number to plug into a household budget.
What This Means for Planning as a Spouse or Partner
The practical implication is straightforward: formal programs cover a minority of the real cost of dementia care, and the majority falls on the household providing it. Since only about 27 to 30 cents of each dollar flows through Medicare, Medicaid, or out-of-pocket medical spending, the bulk of the burden — unpaid hours, lost wages, and diminished wellbeing — lands on the spouse or partner directly, according to the Schaeffer Center's analysis.
A few concrete numbers worth keeping in mind when assessing your own situation: These figures don't predict what any individual household will spend or lose. They establish that the financial and personal weight of dementia care is structured to fall disproportionately on spouses and partners rather than on insurance or government programs — a pattern that held in both the 2025 and 2026 versions of the estimate.
- Unpaid caregiving is valued at $34.50 per hour — a useful benchmark if you're trying to estimate what your own caregiving time is actually worth.
- Medicare and Medicaid together cover $164 billion of the $232 billion in medical and long-term care spending, leaving $52 billion in direct out-of-pocket costs nationally.
- The newer 2026 total of $818 billion reflects 5.2 million unpaid caregivers logging 6.8 billion hours — the same scale of unpaid labor as the 2025 figure, now spread across a slightly larger caregiver population.
Frequently Asked Questions
Is the $781 billion figure still current?
No. The same USC Schaeffer Center research team published an updated estimate of $818 billion for 2026 in Alzheimer's & Dementia on June 24, 2026, covering 5.7 million Americans with dementia and 5.2 million unpaid caregivers.
What portion of dementia costs does insurance actually cover?
Medicare and Medicaid together covered $164 billion of the $781 billion total in the 2025 estimate — about 21%. Total medical and long-term care spending, including out-of-pocket costs, was $232 billion, or roughly 30% of the whole figure.
How is the value of unpaid caregiving calculated?
The Schaeffer Center valued the 6.8 billion hours of unpaid care nationally at $34.50 per hour, a replacement-cost rate reflecting what it would cost to hire paid help for the same work.
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